Motivated by Others' Preferences? An Experiment on Imperfect Empathy

Jana Hofmeier () and Thomas Neuber ()

CRC TR 224 Discussion Paper Series from University of Bonn and University of Mannheim, Germany

Abstract: People care about others. But how do they assess the utility of others when making other-regarding decisions? Do they apply their own preferences or do they adopt the preferences of the other person? We study this question in a laboratory experiment where subjects in the role of senders can pay money to avoid harm arising to receivers. In a first step, we elicit all subjects’ willingness to pay (WTP) for not having to eat food items containing dried insects. We then show senders the WTPs of receivers and repeat the elicitation procedure, but now with receivers having to eat the food items and senders stating their WTPs to spare the receivers from having to eat them. We find that not only receivers’ preferences matter for decisions but also senders’ own preferences, a phenomenon for which we use the term imperfect empathy. In motivating prosocial transfers, senders’ and receivers’ WTPs act as complements by reinforcing each other. Conversely, pairs of sender and receiver who are dissimilar generate lower transfers than others. Since transfers usually benefit receivers more than they cost senders, we also find that dissimilarity within pairs reduces welfare. Our results complement the extensive literature on prosocial preferences, which so far abstracts from heterogeneous valuations. The implications might be far-reaching. For public welfare systems, e.g., systematic differences in consumption preferences between net payers and recipients could undermine public support.

Keywords: altruism; empathy; prosocial giving (search for similar items in EconPapers)
JEL-codes: D64 D90 D91 (search for similar items in EconPapers)
Pages: 34
Date: 2019-05
New Economics Papers: this item is included in nep-exp
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Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:bon:boncrc:crctr224_2019_096

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